Business Opportunity Escrow Check List

 

____ 1. Has Buyer applied and qualified for any special licenses or permits which may be required by:
____            a) State of California pursuant to the operation of the particular business?
____            b) County and/or City in which Business is located?
____                  1) Each may have ordinances which may carry a “successor liability” for non-payment of delinquent or special taxes.
____                  2) Jurisdiction departments or sub-departments of these organs of local government.

____ 2. Does Buyer have consent of Landlord to occupy premises?

____ 3. Have Seller and Buyer arranged with the companies or governmental departments supplying the following services to the premises to furnish closing bills, to refund and/or post deposits for:
____            a) Electricity and Gas?
____            b) Water?
____            c) Sanitation, including garbage disposal?
____            d) Telephone? Interview with representative for continuation for new service-advertising contract?

____ 4. Is a resale permit required by State Board of Equalization?
____            a) Has Seller prepared or advised accountant to prepare final return to obtain clearance?
            (NOTE: To expedite processing, it is suggested that the final return, together with copies of the last two returns and the evidence of full payment thereof be submitted to the local office rather than Sacramento.)
____            b) Has Buyer obtained resale permit?

____ 5. Are there employees and consequently, taxes accruing to the State of California? Employment Development Department?
____            a) Has Seller prepared or advised accountant to prepare final return to obtain clearance?
____                  1) If no employees, Seller would make necessary affidavit to obtain clearance.
            (NOTE: To expedite processing, it is suggested that the final return, together with copies of the last two returns and the evidence of full payment thereof be submitted to the local office rather than Sacramento.)
____            b) Has Buyer secured an Employers Tax ID Number?
____                  1) Obtained Workmen’s Compensation Insurance?

____ 6. Has clearance by County Tax Collector, Business Tax Division, been obtained?

____ 7. Have arrangements been made for taking, evaluating, and preparing statements of inventory covering:
____            a) Fixtures and Equipment?
____            b) Supplies?
____            c) Stock-in-Trade?
____            d) Accounts Receivable?
            (NOTE: It would be a good idea if both Buyer and Seller signed statements to evidence their agreement and approval.)

____ 8. Has Buyer discussed accounting and record-keeping obligations with people qualified to advise him?
____            a) Allocation of purchase price?

____ 9. Has Buyer discussed with his Insurance Agent, and can he obtain insurance coverage recommended by his Agent?

____ 10. Has Buyer filed an affidavit of Fictitious Business name with the County Clerk?
                        Seller must abandon use of the Fictitious Business name prior to filing by Buyer.
                        This is required prior to opening a bank account in the name of the business.

____ 11. Will there be a Covenant Not to Compete?

____ 12. Have financing agreements been made?

____ 13. Area any items, such as personal property taxes, rentals, insurance etc. to be prorated?

____ 14. How are fees and charges, including any commissions, to be apportioned between Buyer and Seller?

____ 15. Will Buyer be responsible for payment of use tax due on sale of fixtures and equipment?

____ 16. When will possession of business be taken, i.e. prior to close of escrow?

____ 17. Has an estimated closing date been set?

____ 18. Have all escrow closing requirements been satisfied?

THIS INFORMATION LISTED ABOVE IS INTENDED TO SERVE ONLY AS A GUIDELINE.

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